Stamp Duty on Share Transfer by way of Gift Deed

[falguni shah]

Dear Members,

Please help in resolving my issue.

In case of Pvt Co in which equity shares are transferred by way of Gift. 

1. How much amount of Stamp Paper is required for execution of Gift Deed in Mumbai? 

2. when we refer to amendment is stamp duty it mentioned that no Stamp Duty is to be paid on when consideration is NIL, the screenshot is amendment is as given below; 

F. Whether Gift of Securities liable for stamp duty after amendment?
Answer: The stamp duty is to be collected on market value based on price or
consideration involved. Accordingly, since consideration involved in case of gift is
“Nil”, no stamp duty will be levied in such transaction w.e.f. July 01, 2020.

As per this no need to pay stamp duty on SH-4?

[V Kartik]

it is payable on face value of shares.

Kartik

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[falguni shah]

Dear Kartik,

Thank You for responding.

As per amended rule of stamp duty it is showing the clause no need to pay stamp duty when consideration is NIL, then y m required to pay stamp duty?.

Also wanted to know on what amount of Stamp Paper Gift Deed to be executed in Mumbai?

[Chandravijay Shah & Co.]

FAQ 24 on Amended Indian Stamp Act, 1899 and Rules made thereunder is reproduced verbatim hereunder:

 

24. Whether stamp duty will be charged on off-market transfer of securities without consideration such on gift, legacy transfer etc.?

 

Answer: No. Section 21 of the Amended Indian Stamp Act read with Section 2(16B) clearly indicates that stamp duty is to be collected on market value which is based on price or consideration involved.

 

Accordingly, the Answer to the Query under reference seems to be in favour of the Shareholder.

On Wed, Dec 21, 2022 at 4:33 PM falguni shah <falguni...@gmail.com> wrote:

[falguni shah]

Thank you sir,

Can you please suggest on stamp paper value for execution of gift deed in Mumbai? 

[Chandravijay Shah & Co.]

Maharashtra (earlier, Bombay) Stamp Act, 1958 Schedule I Article 34 rw Article 25:

3 % of True Market Value of any Movable Asset, including Shares, which is a subject matter of Gift.

Online Payment of Stamp Duty is advisable.

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[falguni shah]

Sir  

When we see article 34 its 3% on immovable property gifted and when we read both article together it describes of conveyance on property.

Can you pls help in identifying we are dont want this gift deed to be registered as unregistered gift deed is a valid deed incase of shares.

[Chandravijay Shah & Co.]

1. Both, Articles 25 and 34 of Schedule I discussed vide our Trailing Email refer to Movable as well as Immovable Assets, not only the latter one. In the same breath, Conveyance too encompasses within its meaning both, Movable and Immovable Assets. Reference to Property does not mean only an Immovable one.

2. Yes, a Registered Gift Deed is not sine qua non, but if you execute it, even if not Registered, then it is prone to Stamp Duty. Instead of Gift Deed, you may exchange written Letters / Acknowledgements between T'ror and T'ree. Ensure all Share Transfer Entries are entered in the relevant Statutory Registers prescribed under CA13 which may help witness the Legal Conclusion of the Gift of Shares. 

As your Query pertains to a PLC, we skip debating the said issue qua a Public Company to save time for all of us.

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[Shubhra garg]

hello...if consideration is NIL..do we still have to pay stamp duty

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CS Shubhra Garg